Maryland Requires Most Health Benefits of Any State, Survey Reports

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WASHINGTON – Maryland requires insurance companies to pay for more benefits than any other state, according to a report last week by an insurance association.

The BlueCross BlueShield Association report identified 26 state mandates in Maryland, covering everything from contraception to in vitro fertilization to wigs. In comparison, the District of Columbia has 9, Delaware has 10 and Virginia has 20.

Of the 26 mandates in Maryland, 14 were enacted after 1995 and all but six were enacted since 1990.

While many of the mandates, such as diabetic supplies and mammography screening, are uncontroversial, the large number has been controversial, said Gerard Petrik, chief of benefits and analysis at the Maryland Health Care Commission.

Insurance companies and some businesses argue that these mandates take away choice for consumers, drive many businesses into self-insurance and force up everyone’s premiums for services they may not want or need.

But Petrik said such concerns are unfounded.

“With a significant number of the mandates, the fiscal impact is relatively insignificant,” Petrik said. He said most carriers would cover the mandated benefits even without the law.

Delegate Michael Busch, D-Anne Arundel, agreed that most mandates are not high-cost and do not have much of an effect on premium costs. But Busch, the chairman of the Economic Matters Committee, which is in charge of health insurance matters, said the companies would not provide the coverage if they were not forced to.

“As Maryland started to go toward managed care, many of the insurance companies started to cut benefits from their packages,” Busch said. “In many cases, the legislature is requiring those benefits that were there in previous years.”

The General Assembly now is considering about 10 new mandates, including pediatric hearing aids, smoking cessation programs and colo-rectal cancer screening. The most expensive proposed mandate would be treatment of morbid obesity, according to a report from the Maryland Health Care Commission, which is required to determine the cost of all mandates and proposed mandates.

The commission is also charged with determining the overall costs of combined mandates in the state. If the cost per person of existing mandates exceeds 2 percent of an individual’s average annual wage, a moratorium is placed on new mandates and a full evaluation of the fiscal, social and medical impact of existing mandates must be given to the General Assembly.

In its report at the end of last year, the commission said that mandates made up 13 percent of premium costs and less than the 2 percent of average annual wage threshold, allowing for the introduction of the additional mandates.

By the commission’s definition, which is slightly different from BlueCross BlueShield, the state has even more mandates, 36, and three required offerings, which insurance companies must offer, but employers or individuals may decline.

This proliferation of mandates has caused many larger businesses to opt out of the system through self-insurance, said W. Miles Cole, senior vice president of government affairs for the Maryland Chamber of Commerce. This allows them to avoid paying for all the state mandates because they fall under federal rules.

“This means employees are taken out of the insurance pool, which drives up costs and ultimately hurts the consumer,” Cole said.

Leighton Ku, senior fellow at the Center on Budget and Policy Priorities, disagreed. He said the evidence that mandates drive businesses to self-insurance is “nonexistent.”

Ku said the mandates are important because most employees have little say on what insurance company their employer chooses. State mandates require a minimum level of coverage.

“The problem is that consumers and patients don’t realize a service isn’t covered until they need it,” Ku said. “Most of the state-mandated services are ones most employees intuitively believe should be covered.”

Ku did acknowledge that mandates may hurt some consumers who are forced to pay higher premiums for services they may not need nor want.

“It does drive up costs for some people,” Ku said.

One of the problems with mandates is they take away employers’ choice, said Michelle Defoe, spokeswoman for CareFirst BlueCross BlueShield in Maryland. She said her company opposes mandates because they don’t allow employers to choose what benefits they want to provide.

There is no easy solution, Busch said.

“Ultimately, somebody has to pay these costs,” Busch said. “If there was on easy answer, we wouldn’t have to continue debating these issues on the federal and state level.”

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